Commentary: What's your mobile wallet recipe?

May 3, 2013

By Chuck Davidson, head of product at CARDFREE

Currently most players in the mobile ecosystem are making claims to have part or all of a mobile wallet solution. These players include mobile network operators, transaction processors, card issuers, payments associations, handset hardware manufacturers, handset software manufacturers and third parties building aggregate mobile wallet experiences. The race to win dominance in the space is strong, because mobile wallets are set to reach critical mass and consumer mindshare is limited. According to ComScore, only 51 percent of U.S. consumers are aware of mobile wallets other than PayPal's solution, so the next 12 to 18 months will be pivotal for shaping consumer behavior and adoption of branded mobile wallet offerings.

For restaurants, the benefits of controlling the mobile wallet experience are plentiful: A branded mobile wallet can drive incremental visits, increase ticket size, steer tender preference and develop more meaningful consumer engagement. The good news is that restaurants are uniquely positioned to compete for leadership in this market due to their ability to directly control two factors: 1) the point of sale and 2) the customer experience. While both are crucial factors, the impact on point-of-sale technologies should be minimal, leaving a majority of the focus on customer experience.

Many of the players in this space have a vested interest in the specific technology used to successfully consume a mobile payment at the POS. This interest is often due to a significant investment in hardware and infrastructure. However, to successfully drive adoption you must look at mobile payment(s) from a customer's point of view. To the customer, technology is irrelevant — it simply must be secure and work every time. As a result, establishments that are competing in the mobile market space would be wise to build from their existing POS infrastructure, assuming that the systems are sound, secure and reliable. If this is the case, then the task to add mobile payments should be quick, easy and intuitive, a benefit to both your CIO and your front-line employees. But, if your technology is not 100 percent reliable and secure, then you cannot hope to succeed.

Getting your customer to go mobileWhen considering your mobile customer, keep in mind that this person is generally willing to try something new — this is good. The mobile customer wants to be an active participant in the experience and is a potential brand ambassador (if you get the experience right). However, beware that all your efforts will fall flat if your customer cannot figure out how to use the mobile wallet — or worse — if they try to use it to pay and they have a bad experience. This is the worst thing you can possibly do to your customer - ask them to trust you and try something new and then deliver a product that falls short in its execution. Not Good!

Customers will also expect an intuitive experience that is well planned and provides engagement - ultimately providing something of value or utility. This can be information that they could not conveniently get elsewhere (such as balance inquiry), an engaging experience (such as sending gifts via social networks) or basic utility (such as the fastest way to get through the check-out process). The mobile consumer rarely gives something a second try if they don't have a good first-time experience, and he or she will quickly delete your mobile payment app from his or her mobile phone deck if it is not adding value.

Chuck Davidson is head of product for San Francisco-based CARDFREE, a company that offers merchants a one-stop solution to mobilize and enhance the customer experience for maximum ROI.